ABL: U.S. lawsuits against Lebanese banks are baseless

Banks Association building in Beirut, Friday, June 22, 2018. (The Daily Star/Hasan Shaaban)

BEIRUT: The Association of Banks in Lebanon Friday dismissed as “baseless” two civil lawsuits filed in New York this week against more than 10 Lebanese banks, as Lebanese officials rushed to emphasize that the action does not indicate souring relations with the U.S. One suit was filed on the first day of the year by three law firms: Osen LLC in New York, Motley Rice in South Carolina and Turner and Associates in Little Rock, Arkansas.

It alleges that at least 11 Lebanese banks “aided and abetted Hezbollah ... by knowingly providing substantial assistance to Hezbollah in the form of financial services and resources.”

A separate suit filed the next day by The Berkman Law Office in New York makes the same allegations.

Both suits seek compensation for damages incurred in Iraq and during Israel’s 2006 War on Lebanon, under a U.S. legal code specifying that liability for acts of international terrorism can fall on any party that aids or abets the perpetrators.

The banks named in the lawsuits are Societe Generale de Banque au Liban, Fransabank, BLOM Bank, Middle East and Africa Bank, Byblos Bank, Bank Audi, Lebanon and Gulf Bank, Banque Libano-Francaise, Bank of Beirut, Bank of Beirut and the Arab Countries, and Jamal Trust Bank, in addition to unidentified defendants.

In a statement released Friday afternoon, the Association of Banks in Lebanon said it was “fully convinced of the lack of truth and seriousness” of the claims, and that it was convinced “of the fairness of the U.S. judiciary, as has been proved in the past.”

“The ABL believes that these two lawsuits do not have any factual or legal basis, and the [Lebanese] banks will coordinate with their lawyers to take the necessary steps to follow up on this issue,” the statement read.

This is not the first case that Osen has filed against Lebanese banks. It also served as representation in a lawsuit against five Lebanese banks in 2007 that was subsequently “rejected by the relevant U.S. courts in New York,” the ABL said.

The firm has also taken suits of this kind before. Osen currently has at least four other counterterrorism financing cases against European banks, including HSBC, Deutsche Bank, Credit Lyonnais and National Westminster Bank. It bills itself as litigating cases that, like those filed earlier this week, are “massive in scope.” Lebanese officials quickly downplayed the significance of the filings, emphasizing that they were made by private entities and did not reflect the position of the U.S. government.

Osen “is a company trying to make money, so it included ... Lebanese banks with deep pockets in hopes of maybe reaching a settlement,” Lebanon’s Ambassador to the U.S. Gaby Issa told The Daily Star over the phone.

He added that the lawsuit would take years. The law firm would need to provide hard evidence to support its case, he said, but Lebanese banks do not, in fact, deal with Hezbollah, as per U.S. regulations and sanctions.

When members of the banking sector were in Washington, D.C., Issa said, “the U.S. Treasury and State Department spoke of their appreciation for Lebanese banks complying with U.S. regulations and their keenness on maintaining the financial stability of Lebanon.”

The ambassador also questioned the motive behind some Lebanese journalists’ reporting on the matter, which, he said, was attempting to jeopardize Lebanon’s stability. “Some Lebanese journalists were writing that the American administration would not allow U.S. correspondent banks to coordinate with Lebanese banks and use the SWIFT [international payments system]. This is completely false, and I received in writing assurances that the U.S. administration was keen on Lebanon’s stability and its banking sector.”

He said the Osen suit was “a long-term lawsuit with no immediate threat.”

A senior Lebanese banking source also stressed the U.S. Treasury wanted a good relationship with Lebanon’s banking sector.

“The recent lawsuits are very politicized, but the U.S. administration has nothing to do with [them],” the source told The Daily Star.

A version of this article appeared in the print edition of The Daily Star on January 05, 2019, on page 1.




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